Abbott's test: Win back clients

Some diagnostics customers in no mood to return

Abbott Laboratories finally has a green light to sell all of its diagnostic tests in the U.S., but persuading customers to use them again won't be easy.

Since 1999, the U.S. Food and Drug Administration (FDA) banned Abbott, once the dominant player in diagnostics, from selling some of its tests. Abbott's rivals in that time snagged customers, contracts and sales staff.

Many customers switched to F. Hoffman-LaRoche Ltd., Germany's Bayer AG, Johnson & Johnson and others. For them, switching back to Abbott equipment could be costly.

Even worse: Some ex-customers are happy to be rid of Abbott.

"I am going to get rid of everything and anything that Abbott currently has in my lab," says Ronald W. McLawhon, director of regional laboratory services for the University of Chicago Hospitals on the South Side.

Mr. McLawhon says he was frustrated by Abbott even before the FDA ban. He cites broken promises, poor communication and supply shortages stemming from Abbott's long-running clash with the FDA.

The FDA lifted its ban in December. Abbott now must show it learned from the experience to win customers back. A company representative sounds a contrite note.

"What we have heard from customers is that we had an issue with arrogance," she says. "The experience we have had has been . . . very humbling. There is no one who is going to return to those days again."

The dispute with the FDA centered on the way Abbott documented its manufacturing procedures at its Lake County diagnostics factory. The plant makes tests that detect diseases and drugs in blood and other bodily fluids.

The 1999 ban prevented Abbott from introducing new diagnostic products and from selling older ones that hospital labs and blood banks had come to depend on.

The standoff badly damaged the domestic segment of Abbott's $3-billion worldwide diagnostics business. The division accounted for 15% of Abbott's 2003 sales. The unit's overall sales have been largely flat since 1999. Overseas gains were offset by U.S. declines.